[Federal Register: September 4, 2009 (Volume 74, Number 171)]
[Proposed Rules]
[Page 45791-45795]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04se09-22]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Part 2560
RIN 1210-AB31
Civil Penalties Under ERISA Section 502(c)(8)
AGENCY: Employee Benefits Security Administration, Labor.
ACTION: Proposed regulation.
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SUMMARY: This document contains a proposed regulation that, upon
adoption, would establish procedures relating to the assessment of
civil penalties by the Department of Labor under section 502(c)(8) of
the Employee Retirement Income Security Act of 1974 (ERISA or the Act).
Under section 502(c)(8) of ERISA, which was added by the Pension
Protection Act of 2006, the Secretary of Labor is granted authority to
assess civil penalties not to exceed $1,100 per day against any plan
sponsor of a multiemployer plan for certain violations of section 305
of ERISA. The regulation would affect multiemployer plans that are in
either endangered or critical status.
DATES: Written comments on the proposed regulation should be received
by the Department of Labor no later than November 3, 2009.
ADDRESSES: You may submit comments, identified by RIN 1210-AB31, by one
of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: e-ORI@dol.gov. Include RIN 1210-AB31 in the
subject line of the message.
Mail: Office of Regulations and Interpretations, Employee
Benefits Security Administration, Room N-5655, U.S. Department of
Labor, 200 Constitution Avenue, NW., Washington, DC 20210, Attention:
Civil Penalties Under 502(c)(8).
Instructions: All submissions received must include the agency name
and Regulatory Information Number (RIN) for this rulemaking. Comments
received will be posted without change to http://www.regulations.gov
and http://www.dol.gov/ebsa, and made available for public inspection
at the Public Disclosure Room, N-1513, Employee Benefits Security
Administration, 200 Constitution Avenue, NW., Washington, DC 20210,
including any personal information provided. Persons submitting
comments electronically are encouraged not to submit paper copies.
FOR FURTHER INFORMATION CONTACT: Michael Del Conte, Office of
Regulations and Interpretations, Employee Benefits Security
Administration, (202) 693-8500. This is not a toll-free number.
SUPPLEMENTARY INFORMATION:
A. Background
Section 202 and section 212 of the Pension Protection Act of 2006
(PPA), Public Law 109-280, respectively, amended ERISA by adding
section 305 and amended the Internal Revenue Code (Code) by adding
section 432, to provide additional rules for multiemployer defined
benefit pension plans in endangered status or critical status. All
references in this document to section 305 of ERISA should be read to
include section 432 of the Code.\1\
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\1\ Pursuant to Reorganization Plan No. 4 of 1978, 43 FR 47713
(Oct. 17, 1978), the Department of the Treasury has interpretive
authority over the minimum funding rules of Title I of ERISA,
including section 305 of ERISA.
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In general, section 305(b)(3)(A) of ERISA provides that not later
than the 90th day of each plan year, the actuary of a multiemployer
defined benefit pension plan shall certify to the Secretary of the
Treasury and to the plan sponsor--(i) Whether or not the plan is in
endangered status for such plan year and whether or not the plan is or
will be in critical status for such plan year, and (ii) in the case of
a plan which is in a funding improvement or rehabilitation period,
whether or not the plan is making the scheduled progress in meeting the
requirements of its funding improvement or rehabilitation plan.
Section 305(b)(3)(D)(i) of ERISA provides that, in any case in
which it is certified under section 305(b)(3)(A) that a multiemployer
plan is or will be in endangered or critical status for a plan year,
the plan sponsor shall, not later than 30 days after the date of the
certification, provide notification of the endangered or critical
status to participants and beneficiaries, the bargaining parties, the
Pension Benefit Guaranty Corporation, and the Secretary of Labor.\2\
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\2\ Pursuant to section 305(b)(3)(D)(iii) of ERISA, the
Department of Labor issued proposed 29 CFR 2540.305-1, which
includes a model notice for plans in critical status. See 73 FR
15688 (Mar. 25, 2008). However, section 102(b)(1)(C) of the Worker,
Retiree, and Employer Recovery Act of 2008, Public Law 110-458,
signed into law on December 23, 2008, transferred the Secretary of
Labor's obligation to prescribe a model notice to the Secretary of
the Treasury, in consultation with the Secretary of Labor.
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Section 305(c)(1)(A) and section 305(e)(1)(A) provide that in the
first year that a plan is certified to be in endangered or critical
status, the plan sponsor generally has a 240-day period
[[Page 45792]]
from the required date of the certification to adopt a funding
improvement plan (in the case of a plan that is in endangered status)
or a rehabilitation plan (in the case of a plan that is in critical
status).\3\ Section 305(c)(1) also requires multiemployer plans in
endangered status to meet ``applicable benchmarks'' as defined under
ERISA section 305(c)(3), as modified by ERISA section 305(c)(5).
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\3\ The Worker, Retiree, and Employer Recovery Act of 2008,
Public Law 110-458 (WRERA), permits multiemployer plans to delay
temporarily their endangered or critical status under section 305 of
ERISA. Section 204 of WRERA provides that a multiemployer plan may,
for its first plan year beginning during the period from October 1,
2008, through September 30, 2009, elect to keep its status for the
plan year preceding such plan year for purposes of section 305 of
ERISA and section 432 of the Code. For example, a plan that was not
in endangered status for 2008 may elect to keep that non-endangered
status for 2009 even if it is in fact in endangered status. On March
27, 2009, the Internal Revenue Service issued Notice 2009-31, 2009-
16 I.R.B. 856, providing guidance to multiemployer plans relating to
such elections, and on April 30, 2009, issued Notice 2009-42, 2009-
20 I.R.B. 1011, modifying Notice 2009-31 to provide an extension of
the election period and relief for plans needing arbitration on the
election.
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Section 202(b)(3) of the PPA added section 502(c)(8)(A) to ERISA
which gives the Secretary of Labor the authority to assess a civil
penalty of not more than $1,100 a day against the plan sponsor for each
violation by such sponsor of the requirement under section 305 to adopt
by the deadline established in that section a funding improvement plan
or rehabilitation plan with respect to a multiemployer plan which is in
endangered or critical status.\4\ Section 502(c)(8)(B) of ERISA
provides the Secretary of Labor with the authority to assess a civil
penalty of not more than $1,100 a day against the plan sponsor of a
plan in endangered status, which is not in seriously endangered status,
that fails to meet the applicable benchmarks under section 305 by the
end of the funding improvement period with respect to the plan.\5\
These provisions added by the PPA section 202(b)(3) are effective for
plan years beginning on or after January 1, 2008.
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\4\ An excise tax under Code section 4971(g)(4) generally
applies, in addition to any penalty under ERISA section 502(c)(8),
in the case of a failure to adopt a rehabilitation plan with respect
to a multiemployer plan in critical status.
\5\ An excise tax under Code section 4971(g)(3) generally
applies in the case of a failure by a multiemployer plan in
seriously endangered status to meet the applicable benchmarks by the
end of the funding improvement period or a failure of a plan in
critical status to meet the requirements applicable to such plans
under section 432(e) of the Code.
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B. Overview of Proposed 29 CFR 2560.502c-8
In general, this proposed regulation sets forth how the maximum
penalty amounts are computed, identifies the circumstances under which
a penalty may be assessed, sets forth certain procedural rules for
service by the Department and filing by a plan sponsor, and provides a
plan sponsor a means to contest an assessment by the Department by
requesting an administrative hearing.
Paragraph (a) of the regulation addresses the general application
of section 502(c)(8) of ERISA, under which the plan sponsor of an
eligible plan shall be liable for civil penalties assessed by the
Secretary of Labor in each case in which there are certain violations
of section 305 of ERISA.
Paragraph (b) of the regulation sets forth the amount of penalties
that may be assessed under section 502(c)(8) of ERISA and provides that
the penalty assessed under section 502(c)(8) for each separate
violation is to be determined by the Department, taking into
consideration the degree or willfulness of the violation. Paragraph (b)
provides that the maximum amount assessed for each violation shall not
exceed $1,100 a day per violation or such other maximum amount as may
be established by regulation pursuant to the Federal Civil Penalties
Inflation Adjustment Act of 1990.\6\
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\6\ The Federal Civil Penalties Inflation Adjustment Act of 1990
(the 1990 Act), Public Law 101-410, 104 Stat. 890, as amended by the
Debt Collection Improvement Act of 1996 (the 1996 Act), Public Law
104-134, 110 Stat. 1321-373, generally provides that Federal
agencies adjust certain civil monetary penalties for inflation no
later than 180 days after the enactment of the 1996 Act, and at
least once every four years thereafter, in accordance with the
guidelines specified in the 1990 Act. The 1996 Act specifies that
any such increase in a civil monetary penalty shall apply only to
violations that occur after the date the increase takes effect.
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Paragraph (c) of the regulation provides that, prior to assessing a
penalty under ERISA section 502(c)(8), the Department shall provide the
plan sponsor with written notice of the Department's intent to assess a
penalty, the amount of such penalty, the period to which the penalty
applies, and the reason(s) for the penalty. The notice would indicate
the specific provision violated. The notice is to be served in
accordance with paragraph (i) of the regulation (service of notice
provision).
Paragraph (d) of the regulation provides that the Department may
decide not to assess a penalty, or to waive all or part of the penalty
to be assessed, under ERISA section 502(c)(8), upon a showing by the
plan sponsor, under paragraph (e) of the regulation, of compliance with
section 305 of ERISA or that there were mitigating circumstances for
noncompliance.
Under paragraph (e) of the regulation, the plan sponsor has 30 days
from the date of service of the notice issued under paragraph (c) of
the regulation within which to file a statement making such a showing.
When the Department serves the notice under paragraph (c) by certified
mail, service is complete upon mailing but five (5) days are added to
the time allowed for the filing of the statement (see Sec. 2560.502c-
8(i)(2)).
Paragraph (f) of the regulation provides that a failure to file a
timely statement under paragraph (e) shall be deemed to be a waiver of
the right to appear and contest the facts alleged in the Department's
notice of intent to assess a penalty for purposes of any adjudicatory
proceeding involving the assessment of the penalty under section
502(c)(8) of ERISA, and to be an admission of the facts alleged in the
notice of intent to assess. Such notice then becomes a final order of
the Secretary 45 days from the date of service of the notice.
Paragraph (g)(1) of the regulation provides that, following a
review of the facts alleged in the statement under paragraph (e), the
Department shall notify the plan sponsor of its determination to waive
the penalty, in whole or in part, and/or assess a penalty. If it is the
determination of the Department to assess a penalty, the notice shall
indicate the amount of the penalty. Under paragraph (g)(2) of the
regulation, this notice becomes a final order 45 days after the date of
service of the notice, except as provided in paragraph (h).
Paragraph (h) of the regulation provides that the notice described
in paragraph (g) will become a final order of the Department unless,
within 30 days of the date of service of the notice, the plan sponsor
or representative files a request for a hearing to contest the
assessment in administrative proceedings set forth in regulations
issued under part 2570 of title 29 of the Code of Federal Regulations
and files an answer, in writing, opposing the sanction. When the
Department serves the notice under paragraph (g) by certified mail,
service is complete upon mailing but five (5) days are added to the
time allowed for the filing of the request for hearing and answer (see
Sec. 2560.502c-8(i)(2)).
Paragraph (i)(1) of the regulation describes the rules relating to
service of the Department's notice of penalty assessment (Sec.
2560.502c-8(c)) and the Department's notice of determination on a
statement of reasonable cause (Sec. 2560.502c-8(g)). Paragraph (i)(1)
provides that service by the Department shall be made by delivering a
copy to
[[Page 45793]]
the plan sponsor or representative thereof; by leaving a copy at the
principal office, place of business, or residence of the plan sponsor
or representative thereof; or by mailing a copy to the last known
address of the plan sponsor or representative thereof. As noted above,
paragraph (i)(2) of this section provides that when service of a notice
under paragraph (c) or (g) is by certified mail, service is complete
upon mailing, but five days are added to the time allowed for the
filing of a statement or a request for hearing and answer, as
applicable. Service by regular mail is complete upon receipt by the
addressee.
Paragraph (i)(3) of the regulation, which relates to the filing of
statements of reasonable cause, provides that a statement of reasonable
cause shall be considered filed (i) upon mailing if accomplished using
United States Postal Service certified mail or express mail, (ii) upon
receipt by the delivery service if accomplished using a ``designated
private delivery service'' within the meaning of 26 U.S.C. 7502(f),
(iii) upon transmittal if transmitted in a manner specified in the
notice of intent to assess a penalty as a method of transmittal to be
accorded such special treatment, or (iv) in the case of any other
method of filing, upon receipt by the Department at the address
provided in the notice. This provision does not apply to the filing of
requests for hearing and answers with the Office of the Administrative
Law Judge (OALJ) which are governed by the Department's OALJ rules in
29 CFR 18.4.
Paragraph (j) of the regulation clarifies the liability of the
parties for penalties assessed under section 502(c)(8) of ERISA.
Paragraph (j)(1) provides that, if more than one person is responsible
as plan sponsor for the failure to adopt a funding improvement or
rehabilitation plan, or to meet the applicable benchmarks, as required
by section 305 of ERISA, all such persons shall be jointly and
severally liable for such failure. Thus, the entire joint board of
trustees would be jointly and severally liable for any such failure.
Paragraph (j)(2) provides that any person against whom a penalty is
assessed under section 502(c)(8) of ERISA, pursuant to a final order,
is personally liable for the payment of such penalty, and that such
liability is not a liability of the plan. It is the Department's view
that payment of penalties assessed under ERISA section 502(c) from plan
assets would not constitute a reasonable expense of administering a
plan for purposes of sections 403 and 404 of ERISA.
Paragraph (k) of the regulation establishes procedures for hearings
before an Administrative Law Judge (ALJ) with respect to assessment by
the Department of a civil penalty under ERISA section 502(c)(8), and
for appealing an ALJ decision to the Secretary or her delegate. The
procedures are the same procedures as would apply in the case of a
civil penalty assessment under section 502(c)(7) of ERISA.
C. Effective Date
The Department proposes to make this regulation effective 60 days
after the date of publication of the final rule in the Federal
Register.
D. Regulatory Impact Analysis
Executive Order 12866
Under Executive Order 12866 (58 FR 51735), the Department must
determine whether a regulatory action is ``significant'' and therefore
subject to review by the Office of Management and Budget (OMB). Section
3(f) of the Executive Order defines a ``significant regulatory action''
as an action that is likely to result in a rule (1) having an annual
effect on the economy of $100 million or more, or adversely and
materially affecting a sector of the economy, productivity,
competition, jobs, the environment, public health or safety, or State,
local or Tribal governments or communities (also referred to as
``economically significant''); (2) creating serious inconsistency or
otherwise interfering with an action taken or planned by another
agency; (3) materially altering the budgetary impacts of entitlement
grants, user fees, or loan programs or the rights and obligations of
recipients thereof; or (4) raising novel legal or policy issues arising
out of legal mandates, the President's priorities, or the principles
set forth in the Executive Order. It has been determined that this
proposed rule relating to the assessment of civil monetary penalties
under section 502(c)(8) of the Act is not significant under section
3(f)(4) of the Executive Order; and, therefore, it is not subject to
OMB review.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes
certain requirements with respect to Federal rules that are subject to
the notice and comment requirements of section 553(b) of the
Administrative Procedure Act (5 U.S.C. 551 et seq.) and that are likely
to have a significant economic impact on a substantial number of small
entities. Unless an agency certifies that a rule is not likely to have
a significant economic impact on a substantial number of small
entities, section 603 of RFA requires that the agency present a
regulatory flexibility analysis at the time of the publication of the
final rule describing the impact of the rule on small entities and
seeking public comment on such impact. Small entities include small
businesses, organizations and governmental jurisdictions.
For purposes of its analyses under the RFA, EBSA continues to
consider a small entity to be an employee benefit plan with fewer than
100 participants. The basis of this definition is found in section
104(a)(2) of ERISA, which permits the Secretary of Labor to prescribe
simplified annual reporting for pension plans that cover fewer than 100
participants. By this standard, data from the EBSA Private Pension
Bulletin for 2006 show that only 46 multiemployer defined benefit
pension plans or 3% of all multiemployer defined benefit pension plans
are small entities. This number represents .1% of all small defined
benefit pension plans. The Department does not consider this to be a
substantial number of small entities. Therefore, pursuant to section
605(b) of RFA, the Department hereby certifies that the rule is not
likely to have a significant economic impact on a substantial number of
small entities.
The terms of the statute pertaining to the assessment of civil
penalties under section 502(c)(8) of ERISA do not vary relative to plan
or plan sponsor size. The opportunity for a plan sponsor to present
facts and circumstances related to a failure or refusal to comply with
section 305 of the Act that may be taken into consideration by the
Department in reducing or not assessing penalties under ERISA section
502(c)(8) may offer some degree of flexibility to small entities
subject to penalty assessments. Penalty assessments will have no direct
impact on small plans, because the plan sponsor assessed a civil
penalty is personally liable for the payment of that penalty pursuant
to Sec. 2560.502c-8(j)(2).
The Department invites interested persons to submit comments on the
impact of this proposed rule on small entities and on any alternative
approaches that may serve to minimize the impact on small plans or
other entities while accomplishing the objectives of the statutory
provisions.
Paperwork Reduction Act
The proposal is not subject to the requirements of the Paperwork
Reduction Act of 1995 (PRA 95) (44 U.S.C. 3501 et seq.), because it
does not contain a collection of information as defined in 44 U.S.C.
3502(3). Information otherwise provided to the Secretary in connection
with the
[[Page 45794]]
administrative and procedural requirements of this proposed rule is
excepted from coverage by PRA 95 pursuant to 44 U.S.C. 3518(c)(1)(B),
and related regulations at 5 CFR 1320.4(a)(2) and (c). These provisions
generally except information provided as a result of an agency's civil
or administrative action, investigation, or audit.
Congressional Review Act
This proposed rule is subject to the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.) and, upon finalization, will be transmitted
to the Congress and the Comptroller General for review.
Unfunded Mandates Reform Act
For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4), as well as Executive Order 12875, this rule does not include
any Federal mandate that may result in expenditures by State, local, or
Tribal governments, and does not impose an annual burden exceeding $100
million, as adjusted for inflation, on the private sector.
Federalism Statement
Executive Order 13132 (August 4, 1999) outlines fundamental
principles of federalism and requires the adherence to specific
criteria by Federal agencies in the process of their formulation and
implementation of policies that have substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government. This proposed rule does not have
federalism implications because it has no substantial direct effect on
the States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government. Section 514 of ERISA provides, with
certain exceptions specifically enumerated, that the provisions of
Titles I and IV of ERISA supersede any and all laws of the States as
they relate to any employee benefit plan covered under ERISA. The
requirements implemented in this proposed rule do not alter the
fundamental reporting and disclosure, or administration and enforcement
provisions of the statute with respect to employee benefit plans, and
as such have no implications for the States or the relationship or
distribution of power between the national government and the States.
List of Subjects in 29 CFR 2560
Employee benefit plans, Employee Retirement Income Security Act,
Law enforcement, Pensions.
Accordingly, 29 CFR part 2560 is proposed to be amended as follows:
PART 2560--RULES AND REGULATIONS FOR ADMINISTRATION AND ENFORCEMENT
1. The authority citation for part 2560 is revised to read as
follows:
Authority: 29 U.S.C. 1132, 1135, and Secretary of Labor's Order
1-2003, 68 FR 5374 (Feb. 3, 2003). Sec. 2560.503-1 also issued under
29 U.S.C. 1133. Sec. 2560.502c-7 also issued under 29 U.S.C
1132(c)(7). Sec. 2560.502c-4 also issued under 29 U.S.C. 1132(c)(4).
Sec. 2560.502c-8 also issued under 29 U.S.C. 1132(c)(8).
2. Add Sec. 2560.502c-8 to read as follows:
Sec. 2560.502c-8 Civil penalties under section 502(c)(8).
(a) In general. (1) Pursuant to the authority granted the Secretary
under section 502(c)(8) of the Employee Retirement Income Security Act
of 1974, as amended (the Act), the plan sponsor (within the meaning of
section 3(16)(B)(iii) of the Act) shall be liable for civil penalties
assessed by the Secretary under section 502(c)(8) of the Act, for:
(i) Each violation by such sponsor of the requirement under section
305 of the Act to adopt by the deadline established in that section a
funding improvement plan or rehabilitation plan with respect to a
multiemployer plan which is in endangered or critical status; or
(ii) In the case of a plan in endangered status which is not in
seriously endangered status, a failure by the plan to meet the
applicable benchmarks under section 305 by the end of the funding
improvement period with respect to the plan.
(2) For purposes of this section, violations or failures referred
to in paragraph (a)(1) of this section shall mean a failure or refusal,
in whole or in part, to adopt a funding improvement or rehabilitation
plan, or to meet the applicable benchmarks, at the relevant times and
manners prescribed in section 305 of the Act.
(b) Amount assessed. The amount assessed under section 502(c)(8) of
the Act for each separate violation shall be determined by the
Department of Labor, taking into consideration the degree or
willfulness of the failure or refusal to comply with the specific
requirements referred to in paragraph (a) of this section. However, the
amount assessed for each violation under section 502(c)(8) of the Act
shall not exceed $1,100 a day (or such other maximum amount as may be
established by regulation pursuant to the Federal Civil Penalties
Inflation Adjustment Act of 1990, as amended), computed from the date
of the plan sponsor's failure or refusal to comply with the specific
requirements referred to in paragraph (a) of this section.
(c) Notice of intent to assess a penalty. Prior to the assessment
of any penalty under section 502(c)(8) of the Act, the Department shall
provide to the plan sponsor of the plan a written notice indicating the
Department's intent to assess a penalty under section 502(c)(8) of the
Act, the amount of such penalty, the period to which the penalty
applies, and the reason(s) for the penalty.
(d) Reconsideration or waiver of penalty to be assessed. The
Department may determine that all or part of the penalty amount in the
notice of intent to assess a penalty shall not be assessed on a showing
that the plan sponsor complied with the requirements of section 305 of
the Act, or on a showing by the plan sponsor of mitigating
circumstances regarding the degree or willfulness of the noncompliance.
(e) Showing of reasonable cause. Upon issuance by the Department of
a notice of intent to assess a penalty, the plan sponsor shall have
thirty (30) days from the date of service of the notice, as described
in paragraph (i) of this section, to file a statement of reasonable
cause explaining why the penalty, as calculated, should be reduced, or
not be assessed, for the reasons set forth in paragraph (d) of this
section. Such statement must be made in writing and set forth all the
facts alleged as reasonable cause for the reduction or nonassessment of
the penalty. The statement must contain a declaration by the plan
sponsor that the statement is made under the penalties of perjury.
(f) Failure to file a statement of reasonable cause. Failure to
file a statement of reasonable cause within the thirty (30) day period
described in paragraph (e) of this section shall be deemed to
constitute a waiver of the right to appear and contest the facts
alleged in the notice of intent, and such failure shall be deemed an
admission of the facts alleged in the notice for purposes of any
proceeding involving the assessment of a civil penalty under section
502(c)(8) of the Act. Such notice shall then become a final order of
the Secretary, within the meaning of Sec. 2570.131(g) of this chapter,
forty-five (45) days from the date of service of the notice.
(g) Notice of determination on statement of reasonable cause. (1)
The
[[Page 45795]]
Department, following a review of all of the facts in a statement of
reasonable cause alleged in support of nonassessment or a complete or
partial waiver of the penalty, shall notify the plan sponsor, in
writing, of its determination on the statement of reasonable cause and
its determination whether to waive the penalty in whole or in part,
and/or assess a penalty. If it is the determination of the Department
to assess a penalty, the notice shall indicate the amount of the
penalty assessment, not to exceed the amount described in paragraph (c)
of this section. This notice is a ``pleading'' for purposes of Sec.
2570.131(m) of this chapter.
(2) Except as provided in paragraph (h) of this section, a notice
issued pursuant to paragraph (g)(1) of this section, indicating the
Department's determination to assess a penalty, shall become a final
order, within the meaning of Sec. 2570.131(g) of this chapter, forty-
five (45) days from the date of service of the notice.
(h) Administrative hearing. A notice issued pursuant to paragraph
(g) of this section will not become a final order, within the meaning
of Sec. 2570.131(g) of this chapter, if, within thirty (30) days from
the date of the service of the notice, the plan sponsor or a
representative thereof files a request for a hearing under Sec. Sec.
2570.130 through 2570.141 of this chapter, and files an answer to the
notice. The request for hearing and answer must be filed in accordance
with Sec. 2570.132 of this chapter and Sec. 18.4 of this title. The
answer opposing the proposed sanction shall be in writing, and
supported by reference to specific circumstances or facts surrounding
the notice of determination issued pursuant to paragraph (g) of this
section.
(i) Service of notices and filing of statements. (1) Service of a
notice for purposes of paragraphs (c) and (g) of this section shall be
made:
(i) By delivering a copy to the plan sponsor or representative
thereof;
(ii) By leaving a copy at the principal office, place of business,
or residence of the plan sponsor or representative thereof; or
(iii) By mailing a copy to the last known address of the plan
sponsor or representative thereof.
(2) If service is accomplished by certified mail, service is
complete upon mailing. If service is by regular mail, service is
complete upon receipt by the addressee. When service of a notice under
paragraph (c) or (g) of this section is by certified mail, five days
shall be added to the time allowed by these rules for the filing of a
statement or a request for hearing and answer, as applicable.
(3) For purposes of this section, a statement of reasonable cause
shall be considered filed:
(i) Upon mailing, if accomplished using United States Postal
Service certified mail or express mail;
(ii) Upon receipt by the delivery service, if accomplished using a
``designated private delivery service'' within the meaning of 26 U.S.C.
7502(f);
(iii) Upon transmittal, if transmitted in a manner specified in the
notice of intent to assess a penalty as a method of transmittal to be
accorded such special treatment; or
(iv) In the case of any other method of filing, upon receipt by the
Department at the address provided in the notice of intent to assess a
penalty.
(j) Liability. (1) If more than one person is responsible as plan
sponsor for violations referred to in paragraph (a) of this section,
all such persons shall be jointly and severally liable for such
violations.
(2) Any person, or persons under paragraph (j)(1) of this section,
against whom a civil penalty has been assessed under section 502(c)(8)
of the Act, pursuant to a final order within the meaning of Sec.
2570.131(g) of this chapter, shall be personally liable for the payment
of such penalty.
(k) Cross-references. (1) The procedural rules in Sec. Sec.
2570.130 through 2570.141 of this chapter apply to administrative
hearings under section 502(c)(8) of the Act.
(2) When applying procedural rules in Sec. Sec. 2570.130 through
2570.140:
(i) Wherever the term ``502(c)(7)'' appears, such term shall mean
``502(c)(8)'';
(ii) Reference to Sec. 2560.502c-7(g) in 2570.131(c) shall be
construed as reference to Sec. 2560.502c-8(g) of this chapter;
(iii) Reference to Sec. 2560.502c-7(e) in Sec. 2570.131(g) shall
be construed as reference to Sec. 2560.502c-8(e) of this chapter;
(iv) Reference to Sec. 2560.502c-7(g) in Sec. 2570.131(m) shall
be construed as reference to Sec. 2560.502c-8(g); and
(v) Reference to Sec. Sec. 2560.502c-7(g) and 2560.502c-7(h) in
Sec. 2570.134 shall be construed as reference to Sec. Sec. 2560.502c-
8(g) and 2560.502c-8(h), respectively.
Signed at Washington, DC, this 28th day of August 2009.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration,
Department of Labor.
[FR Doc. E9-21343 Filed 9-3-09; 8:45 am]
BILLING CODE 4510-29-P